Companies featured in this edition of the newsletter: ACTC, CHIP, CVM, DKAM, ENZ, IWEB, MBCI, MFGD, PHC

Markets rebounded last week, on the strength of upbeat productivity and manufacturing reports that led to solid gains in all of the major indices. Despite news that the unemployment rate had hit its highest levels in 25 years, the Dow managed to end the week up 310 points, gaining 3.2% on the week to close at 10,023, up 14.2% on the year. The Nasdaq posted a gain of 3.3%, closing at 2112 and extending its yearly gains to 34%, while the S&P 500 and Russell 2000 advanced 3.2% and 3.1% respectively on the week to bring their YTD performance to 18.4% and 16.2%.

Several better than expected economic reports provided buying incentive throughout much of the week, as investors managed to shake off the previous week’s negative bias to send indices into positive territory

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• Wells Fargo (NYSE:WFC) initiated coverage of Cisco (NASDAQ:CSCO) with an "outperform" rating, believing it attractive for a play on an IT spending recovery

• JP Morgan (NYSE:JPM) reported better-than-expected third quarter earnings of 82 cents a share, up from 9 cents a year ago, and ahead of Zacks estimates of 49 cents a share on strong underwriting revenues

• Altera (NASDAQ:ALTR) reported inline quarterly earnings of 19 cents a share, down from 31 cents a share a year ago on revenues of $268 million, which missed estimates of $282 million

• Piper Jaffray (NYSE:PJC) raised its price target on Intel (NASDAQ:INTC) to $26 from $21

• Host Hotels (NYSE:HST) reported third quarter earnings of 11 cents a share, ahead of Zacks estimates of 8 cents a share, on revenues of $912 million

Zacks Investment Research

• First Solar (NASDAQ:FSLR) will be added to the S&P500 to replace Wyeth (NYSE:WYE). • Bernstein initiated coverage of Bank of America (NYSE:BAC) at "outperform" with a $25 price target. • Nokia (NYSE:NOK) was downgraded at Piper Jaffray (NYSE:PJC) with a price target lowered to $14 from $16. • Costco (NASDAQ:COST) received an upgrade at Baird with a price target of $65. • Accenture (NYSE:ACN) issued downside first quarter revenue guidance of $5.3- $5.5 billion, off estimates of $5.54 billion. The firm expects fiscal 2010 revenues of between a 3% drop and 1% growth versus estimates for growth of 2% to $21.99 billion. The company forecast full-year earnings of $2.64 to $2.72 a share, off estimates of $2.77. The firm also upped buyback program by $4 billion and hiked the dividend 50% to 75 cents.Zacks Investment Research

• Palm (NASDAQ:PALM) reported a narrower-than-expected quarterly loss, but its outlook disappointed.  The company also announced plans for a 16 million common share offering.  The firm reported a loss ex-items of 10 cents a share, under Zacks estimates of a 25 cent per share loss, on revenues of $360.7 million versus estimates of $289.1 million

• Valero Energy (NYSE:VLO) topped the list of yesterday's S&P500 gainers, up 6.6%, as Credit Suisse's (NYSE:CS) analyst asserted US refiners likely to see renewed interest based on the increase expected in energy demand

• Citigroup (NYSE:C) analysts upgraded Procter & Gamble (NYSE:PG) shares to "buy" from "hold," lifting the price target to $66 from $54 

• Piper Jaffray raised its rating on Starbucks (NASDAQ:SBUX) to "overweight" nad upped the price target to $24 from $13. The analyst expects earnings to grow at least 17% over the next two years

• JP Morgan (NYSE:JPM) raised its rating on KB

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• Adobe Systems (NASDAQ:ADBE) said it will purchased business software maker Omniture (NASDAQ:OMTR) in an all-cash deal valued at about $1.8 billion

• Best Buy (NYSE:BBY) projects comparable sales for the year will be flat to off 2%, up from its earlier projected drop of up to 5%.  The firm raised its full-year guidance to $2.70 to $3.00 from $2.50 to $2.90, based on "increased optimism" for its second half

• EBay (NASDAQ:EBAY) shares rose 1.3% on an upgrade from Piper Jaffray

• Yahoo (NASDAQ:YHOO) shares gained 5.4% after Sanford Bernstein upgraded the shares to "outperform"

• Johnson & Johnson (NYSE:JNJ) lowered its bid for an 18.4% stake in Elan by $115 million to $885 million

• Kraft (NYSE:KFT) advised of plans to enter talks with Cadbury, and said the company does not need to sell operations to afford its $16 billion bid

• Citigroup (NYSE:C) sold $5 billion in 2- and 3-year bonds backed by

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Companies featured in this edition of the newsletter: CUR, CVM, DKAM, ICLK, IMUC, IWEB, OMCM, ONEZ, SVUL, TAGS

Markets managed to extend their run this week, hitting fresh highs for ‘09 despite coming under pressure from negative economic reports and a significant two week correction in Chinese equity markets. All told, the Dow ended up 2.0%, gaining 184 points to close at 9505, extending its yearly gains to 8.3%. The Nasdaq finished the week up 1.8%, closing back above 2000 at 2020, up 28.1% on the year, while the S&P 500 and Russell 2000 managed to post gains of 2.2% and 3.1% respectively, bringing their yearly gains to 13.6% and 16.4%.

Concerns stemming from weakness in Chinese markets which have surrendered 20% in the past two weeks after climbing 109% from October lows spooked many investors expecting a similar correction in US markets early in the week. US

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div style="text-align: justify;"span style="font-weight: bold;"PetSmart (NASDAQ:PETM)/span is getting at least 2 downgrades this morning following weaker than expected results and guidance out last night:br /br /span style="font-weight: bold;"- Credit Suisse/span is downgrading PETM to Neutral from Outperform as, unlike other industry leaders, PETM is not only seeing sales slow, but is seeing margins decline as its mix deteriorates. Taking away the earnings upside moves PETM down on firm's investment attractiveness scale. Firm is lowering their price target to $21.br /br /span style="font-weight: bold;"Investment case:/span PetSmart has always been a tween’er that has moved on its own results. It does not offer the cyclicality due to its food sales that investors looking for an economic uplift can find in many of firm's names. Nor does it offer the secular story that CSFB's DIY auto names do. However, the growth of services, lower expense growth and premium food inflation seemed enough to ...

UBS and Piper Jaffray are out positive on span style="font-weight: bold;"AnnTaylor (NYSE:ANN)/span:br /div style="text-align: justify;"br /span style="font-weight: bold;"- UBS is upgrading ANN to Buy from Neutral and raising their target to $15 (prev. $12) /spansaying they believe the Street is laser focused on a potential turn at the company’s heritage Ann Taylor business, with little mention of Loft. However, they view Loft as the division that should be in the spotlight for two key reasons: one, Loft is currently and will continue to be a more meaningful contributor to total sales, and two, the still very challenging environment could allow Loft to gain share from customers who continue to trade down, especially as the fashion and fits have improved meaningfully, in firm's view.br /br /span style="font-weight: bold;"Loft is currently 50% of sales, Ann Taylor only 30%, with balance at Factory. /spanLoft has become a significant piece of the total business, ...

• AIG International (NYSE:AIG) reported its first interim profit since the third quarter of 2007, beating estimates with adjusted earnings of $2.57 a share, topping projections of $1.67 on revenues of $2.95 billion ahead of revenue estimates of $19.9 billion

• Fannie Mae (NYSE:FNM) asked for an additional $10.7 billion cash infusion from the government, following its quarterly post of a $2.67 per share loss, or $15.2 billion

• NVIDIA (NASDAQ:NVDA) reported second quarter earnings of 7 cents a share, 9 cents ahead of estimates of a loss of 2 cents per share on revenues of $776.5 million, which beat estimates of $710.18 million

• Piper Jaffray (NYSE:PJC) upgraded shares of Crocs (NASDAQ:CROX) to "over-weight"

• Morgan Stanley (NYSE:MS) announced repurchase of $950 million of its warrants from the US Treasury, providing a 20% annualized return to US taxpayers

• CBS (NYSE:CBS) reported second quarter earnings of 8 cents a share, one penny ahead of

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div style="text-align: justify;"Piper Jaffray is upgradingspan style="font-weight: bold;" Crocs (NASDAQ:CROX) /spanto Overweight from Neutral with a $7.50 target price (prev $3)br /br /Piper expect share price appreciation to accompany consistent fundamental improvement amp; profitability potential in next 12 months. Q2 results outpaced estimates and guidance; clear signals that company is achieving early turnaround success.br /br /1) Strength in consumer demand (on lowered expectations) is encouraging; brand equity remains high; visibility limited but improving.br /br /2) Wholesale/retail, U.S./int'l, and product mix all contributing to better margin profile; mgmt reiterated its med-term mid-teens op margin target.br /br /3) International markets represent 60%-plus of revenues; Asia strength a key driver.br /br /4) Direct to consumer platform mitigates risk tied to domestic wholesale order volatility; DTC exceeds 50% of U.S. revenues; growth of 20%-plus is reasonable.br /br /5) Company is bank debt free; $60M in cash ($0.70/share); receivables collection much improved and inventory levels ...